Treasury Wine Estates (TWE)

The world’s largest listed pure play wine producer,
Treasury Wine Estates
, reported a 20 per cent fall in half-year earnings last week, as it suffered from a high Australian dollar and invested in an emerging markets strategy. The result was within expectations and the company maintained full-year guidance for “mid- to single-digit" earnings growth. Treasury plans to enter markets including India, Russia and Brazil as part of a longer-term strategy to sell more premium wine around the world. The strategy is costing the company short-term earnings, but the maker of Penfolds, Wolf Blass and Rosemount hopes the investment will yield solid returns. The share price is up by 17.38 per cent for the year, against the S&P/ASX 200, which is up by 8.03 per cent in the same period. Bank of America Merrill Lynch has a “buy" on the stock with a target price of $6.50. The broker is predicting a turnaround in the company’s US business and macro-economic conditions.